The Value of Education

Felix Salmon (one of my favorite financial writers) writes about MOOCs—Massive Open Online Courses—on his blog today.  I am a huge fan of online learning.  In just a few months, YouTube has done more to improve my culinary skills than the substantial collection of cook books (with exception to my Pierre Franey books) and food magazines stored, for years, on my apartment’s limited shelf space.  Mr. Salmon’s point is that easy access to the best that higher education has to offer, lectures from great teachers at top universities, will engender increased desire for more higher education.  In other words, demand for college education should increase. 

While I’m not sure this will happen as he describes, it is clear that classes accessible to anyone with an internet connection, like those offered by Coursera (I took several classes on this platform and loved the experience), will change how we learn and may impact the cost of higher education.  Perhaps this system will defray the costs of obtaining a degree.  A student who wants a computer science degree, for example, can familiarize herself with the discipline by taking several free online courses.  In the process, she could earn credits towards her degree.  This might limit the number of credits for which she needs to pay.  Online classes may also improve her academic skill level, which would enable better grades and reduce the incidence of dropped classes while in a costly college environment.  In this way, college may become more accessible to lower income students.  Replicate this millions of times, and the impact will be phenomenal. 

You don’t need a degree to acquire skills (employers often seem not to know this).  Even without an increase in diplomas, online education will improve the general skill and knowledge level of our workforce.  This should lead to a higher quality workforce.  It could also increase entrepreneurial activity.  

I can point to my own example as evidence.  As mentioned, because of online learning, my cooking techniques have improved.  So has my knowledge of programming and statistics.  I didn't need to pay several thousand dollars to sit in a class to acquire these skills.

Ultimately, it is people, not machines, property, securities, or other tangible or intangible assets, which generate true wealth (higher living standards).   As always, the value generated in our economy depends upon our collective efforts.  It depends upon human skill, knowledge, and health.  From my perspective, this is where the power of the information age will have its greatest impact.  By disseminating information and knowledge in new and ingenious ways to one and all, allowing us to more easily combine and improve upon that knowledge in ever more clever ways.  Of course, this will take time.  There will be lots of failures.  But the future is bright.